BMW, Mercedes could develop compact cars together, paper says

BMW and Mercedes-Benz could jointly develop the next generations of their compact cars — the BMW 1 series and the Mercedes A-class family — as part of a wider cooperation that would also include sharing technology for autonomous cars, a German newspaper reported.

The two automakers need to rein in costs so they can afford to invest billions in self-driving systems to avoid losing their technological edge to traditional rivals and newcomers such as Waymo, Handelsblatt said.

Sharing a compact-car architecture would save the two automakers billions in investment costs, the paper reported, quoting insiders with knowledge of the discussions.

If the discussions go further, the first joint compact cars would not appear before 2025, Handelsblatt said. Top management at BMW and Mercedes would face stiff resistance to such a plan from their own engineers, the paper said.